CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Canada-based gold producer Centerra Gold Inc. (TSX:CG) announced today that increased ice movement in the southeast section of the pit will delay scheduled access to the high grade SB zone. Preliminary engineering analysis now indicates production of 390,000 to 410,000 ounces of gold in 2012 at its Kumtor mine, rather than between 575,000 and 625,000 ounces as previously forecast. The revised production profile will continue to be weighted to the fourth quarter.
As previously disclosed, production at Kumtor is dependent on successfully maintaining the mining rates of the waste and ice in the southeast section of the pit to gain access to the higher grade ore in the SB zone. A recent substantial acceleration of ice and waste movement, which was exacerbated by the 10 day labour disruption which occurred in early February 2012, now requires that cutback 14A be delayed to allow for the unloading of such ice and waste in the southeast section of the pit. This is expected to delay the cutback from late 2012 to late 2013, resulting in the deferral into 2013-2015 of production from the high grade SB zone otherwise expected in 2012.
The Company expects to partially mitigate the impact of the movement and the resulting delay in cutback 14A by accelerating mining in the southwest portion of the Kumtor pit to access part of the new reserves (reported in its February 9, 2012 reserve and resource update) in September 2012 to provide higher grade ore for the Kumtor mill.
The Company is undertaking further technical analysis of the impact of the ice movement on its life of mine plan and expects to provide further information on production, capital costs and operating costs in due course.
Kumtor’s collective bargaining agreement expires at the end of 2012. A work stoppage at any time during the year could have a significant impact on Kumtor achieving its revised forecast production. Additionally, achieving the revised 2012 production is dependent on the delivery of new mining equipment on schedule and successfully maintaining the mining rates of the waste and ice in the southern portion of the pit to gain access to the higher grade ore.
Major Assumptions
The following material assumptions have been used to forecast production:
Production forecasts are forward-looking information and are based on key assumptions and subject to material risk factors. If any event arising from these risks occurs, the market price of the Company’s common shares, the Company’s business operations, prospects, financial condition, results of operations or cash flows could be adversely affected. Additional risks and uncertainties not currently known to the Company, or that are currently deemed immaterial, may also materially and adversely affect the market price of the Company’s common shares, the Company’s business operations, prospects, financial condition, and results of operations or cash flows. See the sections entitled “Risk Factors” in the Company’s most recently filed annual information form, available on SEDAR at www.sedar.com and see also the discussion below under the heading “Cautionary Note Regarding Forward-looking Information”.
Qualified Person
The production information and other scientific and technical information in this news release were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and were reviewed, verified and compiled by Centerra’s geological and mining staff under the supervision of Dan Redmond, Ontario Professional Geoscientist, Centerra’s Director, Technical Services – Mining, who is the qualified person for the purpose of NI 43-101.
The Kumtor deposit is described in Centerra’s most recently filed Annual Information Form (the “AIF”) and a technical report dated March 22, 2011 prepared in accordance with NI 43-101. The technical report has been filed on SEDAR at www.sedar.com. The technical report describes the exploration history, geology and style of gold mineralization at the Kumtor deposit. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the drilling programs at the Kumtor site are described in the technical report.
